Jewellery stocks rally on Budget boost, FM exempts income tax up to Rs 12 lakh to boost disposable income

Industry players were also hoping that Budget 2025 make a gold-monetisation scheme announced in 2015 more attractive.

Jewellery stocks were glittering in trade on February 1 after the Finance Minister Nirmala Sitharaman announced that under the new tax system, those earning up to Rs 12 lakh would not be obliged to pay taxes. This is expected to increase household consumption, savings, and investment.

Shares of Kalyan Jewellers, Motison Jewellers, Senco Gold, Goldiam International, Thangamayil Jewellery surged up to 4 percent.

On February 1, Sitharaman released Union Budget 2025-26. In her accompanying speech, she said that under the new regime, there is no tax on income up to Rs 12 lakh, and no tax on income up to Rs 12.75 lakh for salaried people, due to the standard deduction of Rs 75,000.

The jewellery industry's asks from the Union Budget were wide ranging, from further reduction in import duty on gold and setting up a regulator for digital gold, to asking for more attractive terms for gold monetisation scheme. However, the Finance Minister skipped to address these demands.

Import duty on the yellow metal had been significantly in the last Budget from 15 percent to 6 percent, which led to a big rally in the jewellery stocks. Leading jewellery names including PC Jewellers, Kalyan Jewellers and Thangamayil Jewellery surged as much as 167 percent. In this Budget, the industry was hoping that the duty would be further cut down to 3 percent.

Industry players had also put forward other requests such as  a regulator to oversee digital gold, an asset which is gaining popularity, and making a gold-monetisation scheme announced in 2015 more attractive.

Industry leaders had said that if more people were encouraged to adopt this scheme, it could help utilise the locked asset of Indian household gold much more efficiently and help the country decrease its current account deficit.